The US Virgin Islands Is Suing Hess for $1.5 Billion

By: Caribbean Journal Staff - September 14, 2015

A major lawsuit

By the Caribbean Journal staff

The US Virgin Islands government is suing the Hess Corporation for shuttering the HOVENSA refinery in 2012, Governor Kenneth Mapp announced Monday.

According to a complaint filed in Superior Court, the USVI is alleging that Hess committed “serious violations of the law” in closing what was the Caribbean’s largest refinery.

The lawsuit is seeking at least $1.5 billion in damages, a figure it says covers at least $150 million per year in benefits to the people of the territory from 2012 to 2022. The latter date was the time through which Hess “was obligated under the law to continue operating the refinery,” the government said.

The damages triple under Virgin Islands law.

“The is not about a business disagreement. It is about Hess breaking the law,” Mapp said. “The Territory of the Virgin Islands expect that the law is followed by every entity that does business here. Hess violated the law and its obligations to the people.”

The closure of the refinery was devastating to the Virgin Islands’ economy, as HOVENSA had been the USVI’s single-largest private employer.

But while Hess shuttered operations in 2012, then-US Virgin Islands Governor John de Jongh helped broker a deal under which a new company, Atlantic Basin Refining, would have purchased the refinery.

Under the terms of that proposed deal, which was later rejected by the USVI Senate, the government would have received $1.6 billion in fixed payments, with at least 700 jobs created.

HOVENSA was first launched in the mid 1960s on St Croix.

In its complaint, the USVI said that the Hess Corporation violated “the law that dictated operations through 2022.”

“This is about one thing: Hess breaking the law and the resulting hardship to the Territory of the Virgin Islands,” Mapp said. “There are consequences to breaking the law and Hess must fulfill its legal obligations to the Territory.”

The suite alleges that Hess violated the Criminally Influenced Corrupt Organization Act and other laws.

Hess has not yet released a statement on the lawsuit.

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